Wil says that paid upgrades are an important part of a software shop’s business
model. Without that incentive, he would be economically pressured to only
create new software rather than keep upgrading what he’s already made. Drew
says this is falling into the same “old media” trap that the music industry
fell in to. The app store a new delivery and discovery mechanism for customers.
Upgrades bring about spikes in new sales and the reach under the new model is
such that market saturation is a non issue.

I don’t think that app upgrade sales should be so quickly lumped in with “old
media” dilemmas that the content industries face in the digital era. Software
has a different kind of social contract involved than content you consume. The
biggest issue I see with paid upgrades is that there’s no way for multiple
versions to be supported in the App Store. In order to get bug fixes you would
have to get the paid upgrade even if you were quite happy with the
funcitonality you have now.